Months using ReadyForZero: 6
Accounts paid off: 1 of 1
“It got to the point where any time I would get a check, like a birthday check or a tax return check, I would immediately go straight to my bank account to pay my credit card bill. And I would wait for ReadyForZero to process it and get excited when my progress bar went down further.”
This is a story about Laura, who is one of our awesome ReadyForZero users. (That’s her in the photo above)
We all have our own debt story. And what we encourage here at ReadyForZero is to tell your debt story in a way that reflects all the things you’re doing to pay off your debt as well as things that got you into debt.
It’s kind of like Act I, Act II and Act III of a classic movie or play: in Act I, the hero or heroine is introduced and then faced with an incredibly difficult challenge (a villain, illness, or star-crossed love affair). In Act II, the hero or heroine tries to overcome the challenge and although they fight valiantly it’s not clear whether they will be successful. In Act III, they finally succeed and live happily ever after.
In other words, we all need to remember that Act I is only part of our story!
When you’re in debt-payoff mode, you’ve made it to Act II. You’ve identified the problem and you’re fighting against it, and while the result may still be uncertain, you can be confident that Act III will come around eventually and that your story will have a happy ending.
Which brings us to Laura…
ACT I: The Debt Accumulates
A familiar sight: Laura hard at work in the lab
Graduate school and credit cards
For the last seven years, Laura has been a graduate student in a Neuroscience Ph.D. program in New York. Her debt story began in the third year of her program, with a seemingly innocent trip to attend an academic conference. “It started in 2008,” she told us. “I had gone to a conference and charged the airfare and the hotel and everything onto my credit card, knowing that conference would get reimbursed.”
The problem was that having that money on the card led to feeling comfortable with more spending. “I knew, in my head, that it would be reimbursed, so I kept using this credit card thinking, ‘Oh, that money will come back to me.’” Before she knew it, the amount on the card was much more than the amount she would be reimbursed for. “I had already spent and deposited the check, so I basically overspent. That was what kicked it off.”
Then, later, her boyfriend at the time became unemployed and so she started helping him with expenses, which went on her credit card. And while they eventually split up, the debt stayed with her. At the same time, other expenses kept coming up, including travel expenses. “You hit the mid-twenties, and your friends start having weddings, so you’re flying to and from places to go to weddings,” she told us. “That was another big expense.”
After several years, her debt had accumulated and grown to the point where it felt like a weight on her shoulders. She knew it was not going to be easy to pay off, especially on her graduate student stipend.
ACT II: The Payoff Process Begins
Luckily, it was around this time that Laura came across ReadyForZero. She had been using different calculators online and trying to find a tool that would help her manage her debt repayment plan. In January, 2011, while reading a few personal finance blogs, she read about ReadyForZero and decided to try it out.
She immediately liked the ability to use the service at no cost and the way it allowed her to see how much she needed to pay each month. “I was glad it was free,” she said. “That was important at the time, that it was free. I wasn’t willing to pay for something to tell me what to do.”
Once she logged in, she started trying out different payoff scenarios to see what would work best for her. “I liked how ReadyForZero has that debt calculator online and you can calculate what your payments could be. Like, if your payments are this much, this is how many months it will take.” She decided on a specific amount she would pay each month, and then began tracking her progress every month without fail.
Getting intense about debt repayment
In fact, she got so motivated that she couldn’t wait to log into ReadyForZero! “It got to a point where any time I would get a check, like a birthday check or a tax return check, I would immediately go straight to my bank account to pay my credit card bill. And I would wait for ReadyForZero to process it and get excited when the progress bar went down further.”
Those blue progress bars are quite popular with many of our users, and Laura was no exception! She also liked the graph showing her total debt getting smaller and smaller. “Really just having this bar graph in front of me, the progress chart is something that has such a high impact. Maybe that’s what appeals to my scientific training side.”
We were really gratified to hear that ReadyForZero was so helpful to her. She said that prior to finding us, she had tried different sites and didn’t have as much success with them. “I’d been using Mint to try to track my debt and try to pay it down” she said. “I felt like Mint was a little bit fussy. It was judgmental. It was being like, ‘You’re behind on your payments.’ Even if I paid ahead of time, it would just kind of raise the bar further. I was like, ‘Can’t I get a little extra encouragement?”
On the other hand, she found ReadyForZero to have just the right tone. “Going onto ReadyForZero, it was less judgmental and more cheerful and more excited when I get things done. It was more excited for me when I reached a goal, or when I exceeded it.”
She also liked the feature where ReadyForZero sends an e-mail to a friend or loved one to update them on your progress (as a motivational/encouraging tool). She said, “It’s nice. I really appreciated when it would send the emails to my boyfriend and say that I was 25% or 50% or 75% of the way done. He would forward them back to me and say, ‘Congratulations, way to go, I’m really proud of you.’”
Getting on the same page with her boyfriend
In fact, before using ReadyForZero, Laura had been hesitant to share her financial picture with her current boyfriend. She said, “At the time, I was embarrassed to admit to this boyfriend that I had this credit card debt and it was bigger than I wanted it to be but I was trying to keep it down.”
Once she felt like she had a plan in place, she was comfortable sharing with him. And fortunately, he was very supportive and open to pursuing a fun/frugal lifestyle together. Laura told us, “In a city like New York, you could spend anywhere from zero to thousands of dollars every night if you wanted to. It helps — there is something about having that accountability and having somebody who is on your side but not going to judge you when you do splurge a little to celebrate a victory in another aspect of your life, or even [celebrate] paying something off.”
As she got closer and closer to being debt free, their shared focus on budgeting helped her keep that momentum. “I think that helped, with both of us planning to stay in a little bit more often, and not go do extravagant things.”
(As an aside, other financially-minded couples can check out our Relationships and Money resource center)
ACT III: The Heroine Conquers Her Debt
Laura and her boyfriend visiting one of many state capitols
Learning to live on less
With Laura’s intensity and the support of her boyfriend, her progress was at full throttle, and she knew it would only be a matter of time before she paid off all her debt. The two of them continued finding new ways to save money while still creating an enjoyable life together. Their food and entertainment spending decreased dramatically.
“Now we’ve got some favorite recipes that we can both make together. We spend more time together in the kitchen. We started having more time to watch Netflix together,” she said. They even began getting outside more. “We both got crappy bikes from Craigslist, and that helped to have something to do on [nice] days. Once you’ve spent the $60 on each bike, that’s it.”
Making money on the side
In addition to saving money, Laura was so eager to be debt free that she started looking for little opportunities to make money on the side. “I tried to bring in extra income a couple different ways, whether that was through babysitting or dog sitting, that sort of stuff.”
She was also selling unneeded belongings online to increase her cashflow. “I realized that I just had a lot of stuff. I sold stuff and it wasn’t even big ticket items necessarily. It was a $40 pet carrier, or a $20 piece of furniture. I would just put them on Craigslist.” The extra money helped her make even bigger payments each month.
Success… and pursuing her dreams!
Finally, the moment came. Laura was able to make her final payment and with that, she became debt free. “It felt miraculous! It happened three or four months before I thought it would,” she said. “It was shocking.”
Like many other ReadyForZero users we’ve talked to, she realized one of the huge benefits of paying off her debt was that she suddenly had all of this extra money each month to use as she saw fit. “Once I was no longer paying any payments to the credit card company, it felt like I was rich. Suddenly, you have just so much more room in your budget.”
Now that she is debt free, Laura’s thinking about all the things she can do that she’s been waiting to do. For a long time, she and her boyfriend have been hoping to go on a few trips around the U.S. They have an ambitious goal of visiting (and getting a picture in front of) every single one of the 50 state capitols!
And since she also recently defended her dissertation and received her Ph.D. she is especially looking forward to starting her post-graduate life with a clean financial slate. While she searches for her dream job and plans for the future, those monthly debt payments of the past will be far from her mind.
We’re extremely excited for Laura, and we’re so glad that this debt story has a happy ending.
And dear reader, we can’t wait to tell your debt story. It doesn’t matter whether you’re currently in Act I (introduction), Act II (facing the challenge), or Act III (conquering the challenge) — we believe in your ability to reach your own happy ending, not to mention the new happy beginning of your debt-free life.